The Pirates are about to become the latest of many sports teams to begin pay reductions and furloughs for some employees.
Sources tell DK Pittsburgh Sports that, beginning June 1, some employees will have pay reductions of 5 percent or more. There also will be furloughs within business operations.
Baseball operations will be unaffected by furloughs.
Those who have been furloughed will continue to receive medical, dental and vision benefits, and the team will assist them to secure unemployment benefits.
On Apr. 21, the Pirates committed to paying their employees through at least May 31, despite being given the option to start furloughing or cutting pay starting May 1. That option was made possible by commissioner Rob Manfred, who suspended the league's uniform employee contracts.
The only cut the Pirates made this month was they suspended contributions' to the employees' 401(k) plans. The team's executive leadership also took a voluntary salary reduction.
However, as the COVID-19 pandemic continues to prevent baseball from returning, teams are beginning to look for ways to lower costs. Some clubs -- including the Cubs, Mariners and Mets -- have recently begun to announce furloughs and pay cuts.
On May 12, the Penguins announced that some employees will be placed on four-month unpaid leave, in addition to CEO David Morehouse and other executives and hockey staff taking pay cuts.
Bob Nutting, the Pirates' owner, has never taken a salary from the team.
Baseball operations includes front office personnel and scouts, the latter of whom are very important this time of year as the Pirates prepare for the Amateur Draft, which will be held remotely on June 10.
Team president Travis Williams cited the prospect of no ticket revenue, revenue sharing with the players and limited television and sponsorship revenue as part of the reason for the cuts.
This is the first time Williams has acknowledged that fans may not be able to attend games in 2020. The Pirates are currently offering full refunds or future credit to those who have tickets to a cancelled game.
A debate over revenue sharing between the players and owners has put the season in jeopardy. In March, the two sides agreed to pay players a prorated portion of their 2020 salaries, but owners have tried to back away from that deal because they project to lose $640,000 per game if there are no fans in attendance. Instead, they have offered players a 50-50 split of all revenue, but the union has long been against revenue sharing since it would result in a salary cap.
UPDATE 3:04 p.m.: The team confirms the move, accompanied by a statement from Williams:
“The impact of the Coronavirus has been felt by everyone within our community and our industry. The Pittsburgh Pirates organization is no different.
“There continues to be a great deal of uncertainty around the 2020 MLB season, and even if games are played at PNC Park, it will likely be without fans. This situation is creating significant and unforeseen consequences for our business, especially with the prospect of no ticket revenue, no revenue sharing and limited television and sponsorship revenue. It is equally disappointing as it is devastating.
“To date, we have worked hard to minimize the impact on our employees by implementing a number of cost saving measures, including voluntary pay reductions by every member of the executive staff for the remainder of the calendar year.
“While these moves allowed us to continue to employ all full-time employees for the months of March, April and May, I made some very difficult decisions that will regrettably impact members of our Pirates family.
“Earlier today, I told our staff that we will be instituting temporary furloughs for several of our employees within our business operations beginning June 1. This group will remain part of our organization while on furlough. We will cover all medical, dental and vision benefits for them and their families during this time, as well as assist in the process of helping them to secure all available unemployment benefits. No baseball operations staff are being furloughed.
“I have also informed the remaining business and baseball operations employees that we will be making pay reductions for many of them beginning on June 1.
“We care deeply about all of our employees and understand the impact this will have on them. These decisions are very difficult, but are necessary for us to endure this crisis and emerge as strong as possible when we are able to resume normal operations. We look forward to welcoming our employees back to work at that time.”
